Processing payroll overview

• Check date: The date that the paycheck will be made for—the day your team receives their wages for a corresponding pay period.
• Pay period: The timeframe in which your employee worked. 
• Debit date: The date the funds must be available to be taken from your company bank account in order to pay employees by the check date.
  • Important: Your bank account must have enough funds to cover both net payroll and taxes in full by 4 PM PT on the debit date. If funds are not available by the deadline:
    • A $100 processing fee for the error will be charged.
    • Payroll processing will be blocked until the automatic re-debit clears.
    • Access to next-day and 2-day payroll speeds will be suspended for a time.
  • 💡 We recommend using Instant Bank Verification to help prevent errors and fees.
• Payroll submission deadline: The deadline to submit payroll is 4pm PT each day. Payrolls submitted after 4 PM PT will process the next business day.

Regular payroll debit dates

Debit dates are determined by payroll processing speed:

• Next day: The debit day is one business day before the check date for next day payroll processing speed. Sufficient funds to cover both net payroll and associated taxes must be available and continue to be available from the debit date and until Gusto successfully debits the amounts from the bank account specified.
  • Example: Check date is Friday May 15, payroll processing speed is next day
    • Net pay total: $50,000.00
    • Taxes: $25,000.00
    • Total funds to be debited: $75,000
    • Debit date: May 14
• Two day: The debit day is two business days before the check date for two day payroll processing speed. Sufficient funds to cover both net payroll and associated taxes must be available and continue to be available from the debit date and until Gusto successfully debits the amounts from the bank account specified.
  • Example 1: Check date is Friday May 15, payroll processing speed is two day
    • Net pay total: $50,000.00
    • Taxes: $25,000.00
    • Total funds to be debited: $75,000
    • Debit date: May 13
• Four day: The debit day is four business days before the check date for four day processing speed. Sufficient funds to cover both net payroll and associated taxes must be available and continue to be available from the debit date and until Gusto successfully debits the amounts from the bank account specified.
  • Example 1: Check date is Friday May 15, payroll processing speed is four day
    • Net pay total: $50,000.00
    • Taxes: $25,000.00
    • Total funds to be debited: $75,000
    • Debit date: May 11

Backdated payrolls

When you backdate a payroll, you can change the check date to a date in the past as long as it's within the same calendar year quarter that the payroll is being created. For example: 

• Today is June 23rd, and you want to backdate a payroll to April 15th.
• The employees were paid outside of Gusto by check.
• On June 23rd, you enter the backdated payroll to April 15th
• The debit date for this example would be June 24th, the day the backdated payroll is submitted for Gusto to process.
• The funds to cover the payroll taxes associated with the backdated payroll must be available from the debit date until the amount is successfully debited by Gusto.

If you need to update your pay schedule, follow the steps in this article. 

Sweep accounts

We recognize that some companies use sweep accounts. Sufficient funds to cover both net payroll amount and associated taxes must be available in the account from the debit date until the successful debit by Gusto. If sufficient funds are not available as a result of funds being swept later than the debit date, access to next day and 2-day payroll processing speeds will be suspended for a period of time and the ability to process payroll will be blocked until the re-debit clears. Gusto reserves the right to require additional proof of sufficient bank balances prior to processing the payroll, or delay the payroll as a result.

Additional information needed to process my payroll

Given the current economy and recent banking institution challenges, Gusto may take extra precautions to verify the availability of funds to make sure employees are paid on time. We'll notify you if we need you to provide proof of sufficient bank balances on the debit day before the payroll cutoff time of 4:00pm Pacific time.

Plaid is trusted by millions of people to connect their bank accounts to apps like Gusto. 

When you verify with Plaid, you’ll enter your bank username and password, and choose the account you want to use.

• Heads up: In some cases, we may ask you to enter your account and routing number to confirm the details Plaid sends us—some banks require this extra step as an added layer of security. 

Advantages of verifying with Plaid

• Your bank is instantly verified and ready to use—manual verification takes a few business days, and requires a few extra steps before you can use the account.
• Gusto can help you solve bank issues sooner—with access to real-time account information, we can alert you when issues arise and proactively help (ex. you have insufficient funds, but need to pay your employees on time).

Connect to Plaid

1. Sign in to Gusto. 
2. Click the Settings section. 
3. At the top, toggle to the Plan & billing tab. 
   • If you do not have this tab, work with your primary administrator to get the access (or permission) you need. 
4. Under the “Bank accounts” headline, next to each bank account, there'll be a status and any action you can take.
5. Click Connect to Plaid.
6. If we're able to connect, the "Bank Connection" will show a status of "Connected".

We'll initiate 3 separate debit transactions from your company's bank account after each payroll is submitted:

• One for employee pay (who are being paid by direct deposit)
• One for your employee reimbursements
• One for all payroll taxes

These transactions will happen at the same time, ahead of your paydate (the debit date depends on your direct deposit speed).

Employee pay and reimbursements will be sent by direct deposit to their bank accounts, and we'll send your payroll tax amounts to the applicable state and federal agencies.

You may also see debit transactions from your company's bank account for:

• Contractor payments
• Employee or contractor payment reversals
• Monthly invoices
• Historical tax payments
• Tax reconciliation payrolls (when needed)

You can run a "bank transactions" report to view bank transactions and an "agency payments" report to see taxes we've paid on your behalf. Check out this list of the types of reports you can run.

Bank codes related to debits and/or credits from Gusto  

For businesses with more than one employee, you can manage the Run payroll flow with ease using the tools below.

Search

Use the search bar above the "Employees" column to jump directly to the employee's payroll information you're looking to review.

Sort

Use the carat next to the "Employees" column to reveal a drop-down for sorting options. Employees can be sorted by first or last name.

Filter

Use the filter button at the top-right of the payroll page to filter by:

• Employee type
• Department (if enabled)
• Skipped / Not-skipped (on the payroll)

Keep in mind, if one or more employees are selected in the far-left column, the filter option will not appear until those checkboxes are deselected.

Bulk edit

Use the bulk edit tool to apply changes to all or some of your employees. To do so:

1. Sign in to Gusto.
2. Click the Pay section and select Run payroll.
3. Click the checkboxes next to the names of the employees you'd like to make a change for.
   •  To select all employees on the payroll, click the checkbox next to the column titled "Employees." 
4. Click Bulk edit.
5. Select the action you'd like to take from the drop-down.
   • For example, if you'd like to skip the payroll for multiple employees, choose Skip Payroll. If you'd like to add the same note to multiple employees, choose Personal Note.
6. Fill in any additional fields required.
7. Click Update.
8. Repeat as needed for any other bulk edits.
9. Finish running payroll. 

Bulk edit from your mobile device

From payroll, use the bulk edit tool to apply changes to all or some of your team members by:

1. Sign in to Gusto.
2. Click the three dots and choose Select team members.
3. Click the checkboxes next to the names of the team members you'd like to make a change for.
   • To select everyone, click the checkbox next to "Select all" at the top of the employee list.
4. Click the Actions button and select the action you'd like to take.
   • Example: If you'd like to skip multiple team members on payroll, select Skip on payroll. If you'd like to add the same note to multiple team members' paystubs, select Personal note.
5. Fill in the required fields.
6. Click Update.
7. Repeat as needed for any other bulk edits.

Gusto may require you to wire us funds if you run a large payroll. When a single payroll or payment, or a group of payments is run within the same deposit period, has a federal tax liability amount of $100,000 or more, the $100,000 Next-Day Deposit Rule applies. This rule requires the tax amounts be paid by the next business day. Since Gusto deposits taxes on your behalf, we may collect funds via wire or reverse wire to make sure we have the funds before remitting taxes.

If you're required to wire us funds, we'll notify you when you run payroll and provide instructions in your Gusto account to complete the wire. To access our wire information after processing payroll, click the notification at the top of your Home page that reads "See wire transfers".

Complete these steps to make sure you're set up for success if Gusto requests a wire for your payroll or contractor payments: 

• Permission to wire funds: Payroll admins should confirm if you have authorization to wire funds. If you do not, contact the primary account holder or bank account owner to request that authorization be put on file with your company's bank.
• Daily wire limits: Some banks have daily wire limits. It’s important for you to know this amount and if it’s enough to cover your next payroll. If necessary, you can ask your bank to consider increasing the limit.
• Deadline to wire funds: Be sure to check your wire instructions on your Gusto Home page to be sure you're meeting the wire deadline. 

To keep your account safe, we'll never send wire instructions via email or over the phone. Instead, view the wire instructions in your Gusto account on your Home page. If you're instructed to do a wire transfer via email or over the phone, contact assurance@gusto.com before sending funds.

Fees

Your bank will typically charge $10–$30 to send a wire. Our bank will charge $5 to accept it. This $5 charge will appear on your monthly Gusto invoice. 

Set up reverse wire

Make the process of running large payrolls smoother by setting up reverse wire with your bank. Setting up a reverse wire with your bank authorizes Gusto to withdraw funds from your account via wire transfer, rather than you having to wire us the funds when requested. Once you've activated the reverse wire feature in your account, run payroll as normal. If we're going to use a reverse wire to debit your bank account, we'll notify you before you submit the payroll.

Important: Reverse wire takes time to set up and must be done before processing payroll. Contact your bank to learn more about the timeline to make sure you can process payroll on time. 

Payrolls and direct deposits do not process on Federal bank holidays. If a bank holiday falls on the day you typically run payroll, pay employees, or anytime in between, you must run your payroll on the prior business day. We'll send you a reminder if a bank holiday is coming up.